Walmart Shares Surge to Record High After Strong Earnings Report
Walmart (WMT) shares experienced a significant surge on Thursday following the release of the company’s second-quarter earnings report. The report revealed that Walmart’s earnings exceeded expectations, and the company also raised its full-year outlook. This positive news led to a 6.6% increase in the stock price, reaching a new record closing high of $73.18.
Technical Analysis of Walmart’s Chart
Walmart shares have been on an upward trend since November 2022 when the 50-day moving average (MA) crossed above the 200-day MA, generating a golden cross buy signal. Despite a recent pullback of around 6%, the stock found buying interest near the 50-day MA before the earnings-driven surge to a new all-time high.
The surge in Walmart’s stock price occurred on the highest trading volume since mid-May, indicating active participation by institutional investors. This suggests that there is strong confidence in the company’s performance and future prospects.
Upside Price Target for Walmart Shares
With Walmart shares now trading in uncharted territory, it is challenging to analyze higher price action on the chart. However, a bars pattern can be used to project a potential price target. By considering the stock’s trending move from early May to mid-July and positioning it from this month’s low, an upside target of around $80 is forecasted.
This technique also provides a timeframe for when Walmart shares may reach the target. The previous trending move took place over 52 trading days, suggesting that if a similar trend plays out, the shares could reach the target by late October.
Retracement Areas to Monitor
While the record close on Thursday is a positive sign, there is always the possibility of profit-taking after a strong move. The relative strength index (RSI) indicator is nearing overbought territory, indicating a potential for a retracement. Investors should monitor two key support levels that may come into play during retracements.
The first support level is around $71, which is near the stock’s prior record high. This level may need to be tested before a sustained move higher. A more significant pullback could see the shares revisit the $62 area. This location on the chart is just above the rising 200-day MA and is likely to encounter support from a two-month period of price consolidation between March and May.
Conclusion
Walmart’s strong second-quarter earnings report has led to a surge in its stock price, reaching a new record closing high. The technical analysis of the stock’s chart suggests a potential upside target of around $80, with a timeframe of late October if historical trends repeat. However, investors should be cautious of potential retracements and monitor support levels at $71 and $62.
It is important to note that the information provided in this article is for informational purposes only and should not be considered as financial advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.
Disclaimer: The comments, opinions, and analyses expressed in this article are solely those of the author and do not reflect the official policy or position of Investopedia. The author does not own any of the securities mentioned in this article.
